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Merit review WC035/18

Findings on review

The following finding is made by the State Insurance Regulatory Authority (“the Authority”) on review.

Section 39 of the of the Workers Compensation Act 1987 (“the 1987 Act”) applies to the worker and they had no entitlement to weekly payments of compensation.

Recommendations based on findings

Under section 44BB(3)(e) of the 1987 Act the Authority may make binding recommendations to an insurer based on the findings of its review.

The Authority does not make any recommendations to the Insurer for the reasons given below.

Background

The worker sustained an injury in the course of their employment with the pre-injury employer. The accepted date of injury is XXXXXXXX.

The Insurer accepted liability for the injury and the worker has been in receipt of weekly payments of compensation from the Insurer.

In November 2017, a representative of the Insurer had a telephone discussion with the worker and issued a written notice on dated November 2017 advising them that they had been in receipt of 242 weeks of weekly payments of compensation and that they were likely to reach the “260-week limit” in March 2018. The Insurer advised the worker that as their whole person impairment was under 21%, they would not be entitled to weekly payments beyond 260 weeks in accordance with section 39 of the 1987 Act.

In December 2017, the Insurer issued a further notice referring to the telephone discussion in November 2017 and advising that the worker’s last date of payment would be March 2018.

In February 2018, the worker made an application for internal review with the Insurer in respect of the decision to cease their weekly payments of compensation under section 39 of the 1987 Act. The Insurer did not conduct an internal review in response to the worker’s application.

The worker made an application for merit review by the Authority. The application was received by the Authority in April 2018. The application is accepted under section 44BB(3)(b) of the 1987 Act.

Legislation

The legislative framework governing work capacity decisions and reviews is contained in the:

Section 44BB of the 1987 Act provides for merit review of a work capacity decision of the Insurer, by the Authority.

Documents considered

The documents I have considered in this review are those listed in, and attached to, the application for merit review, the Insurer’s reply and any further information provided by the parties.

I am satisfied that both parties have had the opportunity to respond to the other party’s submissions and that the information provided has been exchanged between the parties.

Submissions

In the application for merit review, the worker makes submissions in relation to the difficulties they have faced with the two injuries they had and being restricted from working for so many years. They submit that if they need “a 21% total impairment I must be up to that level I think”. They submit that they had to withdraw superannuation funds over the years as they had too many bills to pay and the Insurer now wants to stop their weekly payments. They submit that they just do not think it is fair.

In the reply to the worker’s application for merit review and earlier correspondence dated April 2018, the Insurer makes a number of submissions in relation to the Authority’s jurisdiction to review this matter. The Insurer submits that “there is no current work capacity decision in place on the worker’s claim” and that section 39 of the 1987 Act has a statutory mandate/operation to cease weekly benefits exclusive of any decision of the Insurer. It submits that the Authority does not have jurisdiction to review this matter as it considered that the application for review of the worker’s weekly benefits ceasing is not as a result of a work capacity decision made by the Insurer but as a result of the worker reaching the “5 year limitation” for entitlement to weekly benefits in accordance with section 39 of the 1987 Act.

Reasons

Nature of merit review

This matter involves a merit review of the work capacity decision of the Insurer in accordance with section 44BB(l}(b} of the 1987 Act. The review is not a review of the Insurer's procedures in making the work capacity decision and/or internal review decision. The review requires that I consider all of the information before me substantively on its merits and make findings and recommendations that, in light of the information before me, are most correct and preferable.

I note that the Insurer makes a number of submissions in relation to the Authority not having jurisdiction to review the decision to cease the worker’s weekly payments of compensation under section 39 of the 1987 Act. I have considered the Insurer’s submissions however I am not persuaded that the decision to cease the worker’s weekly payments of compensation is not a work capacity decision under section 43 of the 1987 Act. I consider that it is a decision that is reviewable by the Authority in accordance with section 44BB(1)(b) of the 1987 Act.

Work capacity decisions are described under section 43 of the 1987 Act as follows:

43 Work capacity decisions by insurers

(1) The following decisions of an insurer (referred to in this Division as work capacity decisions) are final and binding on the parties and not subject to appeal or review except review under section 44BB or judicial review by the Supreme Court:

(a) a decision about a worker's current work capacity,

(b) a decision about what constitutes suitable employment for a worker,

(c) a decision about the amount an injured worker is able to earn in suitable employment,

(e) a decision about whether a worker is, as a result of injury, unable without substantial risk of further injury to engage in employment of a certain kind because of the nature of that employment,

(f) any other decision of an insurer that affects a worker's entitlement to weekly payments of compensation, including a decision to suspend, discontinue or reduce the amount of the weekly payments of compensation payable to a worker on the basis of any decision referred to in paragraphs (a)-(e).

(2) The following decisions are not work capacity decisions:

(a) a decision to dispute liability for weekly payments of compensation,

(b) a decision that can be the subject of a medical dispute under Part 7 of Chapter 7 of the 1998 Act.

The Insurer’s decision to cease the worker’s weekly payments of compensation under section 39 of the 1987 Act is a decision that falls under section 43(1)(f) of the 1987 Act as it is a decision that affect’s a worker’s entitlement to weekly payments of compensation.

It is not a decision that falls under section 43(2)(a) or (b) of the 1987 Act. It is not a decision to dispute liability [section 43(2)(a)] and not a decision that can be the subject of a medical dispute under Part 7 of Chapter 7 of the 1998 Act [section 43(2)(b)].

The insurer was required to decide if the necessary elements of section 39 were met for it to apply to the worker. That decision affected the worker’s entitlement to weekly payments of compensation. The insurer needed to base its decision on evidence, for example, about the degree of the worker’s permanent impairment resulting from the injury (however, that does not mean that the decision about whether or not section 39 applies to the worker can be the subject of a medical dispute under Part 7 of Chapter 7 of the 1998 Act). I will proceed to review this decision of the Insurer.

Cessation of Weekly Payments under Section 39

In March 2018, the Insurer ceased the worker’s weekly payments of compensation on the basis that they had received 260 weeks of weekly payments and the criteria under section 39 of the 1987 Act had been met for cessation of the worker’s weekly payments of compensation.

Section 39 of the 1987 Act provides:

Cessation of weekly payments after 5 years

(1) Despite any other provision of this Division, a worker has no entitlement to weekly payments of compensation under this Division in respect of an injury after an aggregate period of 260 weeks (whether or not consecutive) in respect of which a weekly payment has been paid or is payable to the worker in respect of the injury.

(2) This section does not apply to an injured worker whose injury results in permanent impairment if the degree of permanent impairment resulting from the injury is more than 20%.

Note: For workers with more than 20% permanent impairment, entitlement to compensation may continue after 260 weeks but entitlement after 260 weeks is still subject to section 38.

(3) For the purposes of this section, the degree of permanent impairment that results from an injury is to be assessed as provided by section 65 (for an assessment for the purposes of Division 4).

There is no dispute between the parties that the worker had been in receipt of over 260 weeks of weekly payments of compensation as at March 2018 when the Insurer ceased the worker’s weekly payments under section 39 of the 1987 Act. I am satisfied that section 39(1) is satisfied.

Section 39(2) provides that if the worker’s injury results in a degree of permanent impairment of more than 20%, the section does not apply to them. This is the area of dispute between the parties. The worker submits that their condition has deteriorated since the assessment of their permanent impairment conducted in 2007 that the Insurer relies on and that the degree of permanent impairment would now be over 20%.

The assessment of permanent impairment that the Insurer relies upon and in which the Insurer advises that the worker has received lump sum compensation in respect of is a Medical Assessment Certificate – Assessment of Degree of Permanent Impairment issued by the Workers Compensation Commission dated November 2007. It is an assessment of Approved Medical Specialist and certifies the worker with Whole Person Impairment level of 10%.

As part of their application for merit review, the worker has submitted a WorkCover NSW certificate of capacity dated February 2018 certifying that they had ‘no current work capacity’ and a medical certificate completed by the worker’s doctor dated April 2018 stating that the worker’s condition has “gradually worsened in the last years” and they have been unable to work.

I acknowledge the worker’s submissions and the medical information they have submitted indicating that their condition has worsened in the last years. However, in order for the exemption under section 39(2) of the 1987 Act to apply, the worker’s injury must result in a degree of permanent impairment of more than 20%. There is no evidence before me that this is the case. The information before me indicates that the degree of permanent impairment has been assessed in accordance with section 65 of the 1987 Act as 10%. I am satisfied that section 39(2) and 39(3) is satisfied.

Accordingly, I am satisfied that the Insurer’s decision to apply section 39 to the worker and cease their weekly payments of compensation in March 2018 was the correct and preferable decision.

Given that I have found that the correct and preferable decision is the same as that of the Insurer, there is no need for the Insurer to adopt any alternative course of action on the basis of my finding. I make no recommendation.

Merit ReviewerMerit Review ServiceDelegate of the State Insurance Regulatory Authority